Looking to test the probability of a pattern over history.
Looking at the European or DAX market opening. I will outline the criteria I look for.
Price makes a new high or low between certain minutes, for example 5 minutes before the opening until 45 minutes after the opening.
If a new high low is made, then I look for a 25% retracement to the days opposite high or low. Once this level is met then I would want to open a buy or sell position, towards the opposite high low. The stop loss would be set to 50 points outside of the original high/low. The take profit would be set at the opposite second high/low.
For example, lets say price opens the day at 1.10300. 10 hours later at the DAX opening, price makes a new daily high at 1.10450. Lets say the days low was made at 1.10250, creating a 200 point difference between the days high and low. After hitting the high at 1.0450, price retraces down to 1.10400, a 25% retracement to the days opposite high/low. At this level a sell order is placed with a stop loss 50 points above the high, at 1.10500, 100 points for the stop loss. The take profit would be set at the the low, at 1.10250, 150 points from the sell order. A successful trade would give 1:1.5 risk to reward in this scenario.
I would like to be able to tweak some of these variables so that I could test and determine what the most viable pattern to trade would be, and then create an EA to trade it.
The variables would be:
1. The timing for when a new high or low could be made, initiating a possible trade.
2. The percentage of a pullback needed to initiate the trade.
3. The distance of the stop loss.
4. The location of the take profit.
Not sure of an appropriate price for this, please let me know if there is a price outside the given budget.